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The Bank of New York Mellon's Pershing Unit Releases New Study Outlining Key Trends and Best Practices for Broker-Dealer Firms.

Broker-Dealers Will Need to Refine Business Models, Increase Operational Efficiency and Broaden Support for Investment Professionals to Achieve Continued Success

JERSEY CITY, N.J., June 2 /PRNewswire-FirstCall/ -- Pershing LLC, a subsidiary of The Bank of New York Mellon Corporation, released a new independent study today with InvestmentNews and CAST Management Consultants, Inc. entitled The Broker-Dealer of the Future.

The study assesses the outlook for the broker-dealer industry and identifies key opportunities and challenges that are propelling change in the marketplace. According to the research, broker-dealers are projected to grow by 21% per year, doubling in size over the next five years. Highlights from the study include:
 -- The Critical Role of the Broker-Dealer: A number of gaps exist between
 the evolving needs of the individual investor and the product line of a
 typical broker-dealer. Practice management presents an opportunity to
 bridge the gap between investment professionals' expectations and
 broker-dealers' current support. Broker-dealers will need to educate
 investment professionals on lifetime income solutions to help their
 clients better plan for, and more effectively minimize the risks of
 retirement. They will also need to provide investment professionals
 with innovative technology, products and practice management strategies
 to address current and future offerings;
 -- The Looming Investment Professional Shortage Threatens Success: The
 broker-dealer industry continues to face a shortage of high quality,
 top-producing investment professionals. To address the talent
 shortage, broker-dealers will need to re-prioritize resources, empower
 investment professionals to recruit and develop talent on their own and
 adopt strategies beyond traditional recruiting. Succession planning is
 also becoming an increasingly important consideration for
 broker-dealers. The average investment professional is approaching
 their mid-50s and succession planning will allow senior investment
 professionals to monetize the value of their client relationships,
 while providing the broker-dealer with the opportunity to skillfully
 transition the client relationships and retain the associated assets
 within the organization;
 -- The Advisory Business Cannot Be Ignored: Advisory fees are the number
 one source of revenue for broker-dealers. In five years, the
 proportion of revenue represented by fees may exceed 50% of a
 broker-dealer's total revenue. The worlds of the broker-dealers and
 registered investment advisors are no longer separate and distinct.
 Broker-dealers have to decide what risk tolerance they have for dually
 registered firms that wish to hold their advisory assets away, and
 concurrently develop compelling strategies to keep them on their
 platform; and
 -- Shrinking Margins Demand Greater Operational Efficiency: In an
 environment of increasing payouts, scale and efficiency are paramount.
 Broker-dealers will need to continuously evaluate processes and systems
 that promise to improve efficiency. In the search for scale, the
 clearing relationship is the great equalizer -- the scalable platform
 that allows the firm to "borrow" efficiency and shared economies of

Jim Crowley, managing director at Pershing LLC, said, "The broker-dealer industry is entering a period of great opportunity, a time when financial advice will be needed more than ever before. The broker-dealer of the future will be a financial organization that is well differentiated from the competition and capable of attracting and retaining talented investment professionals. Broker-dealers must close the gaps between their current value proposition and the needs of their investment professionals and investors in order to achieve continued growth and success over the long-term."

George Braunegg, founding principal and executive vice president at CAST Management Consultants, Inc., said, "Investment professionals will need to increase their productivity in order for broker-dealer firms to optimize their growth and profitability. Achieving higher productivity will come through various means including innovative solutions using new and existing products, training, practice management support and focused deployment of technology. Determining which of these methods to focus on and rationalizing which organizations to partner with to achieve this goal will be essential for best-in-class broker-dealers of the future."

The Broker-Dealer of the Future is a component of Pershing's Ideas Without Limits(TM) thought-leadership program. The study was commissioned by Pershing LLC and independently executed by CAST Management Consultants, Inc. and InvestmentNews. The research took a multi-pronged approach, accumulating both quantitative and qualitative data to provide a complete analysis on the industry. At the center of the research were two comprehensive surveys released with the support of InvestmentNews: an investment professional survey with 538 participants and a broker-dealer management survey with 65 participants. Research also included over 40 interviews with broker-dealer executives and industry insiders to gain perspective into the evolving market landscape.

Pershing LLC (member FINRA/NYSE/SIPC) is a leading global provider of financial business solutions to more than 1,150 institutional and retail financial organizations and independent registered investment advisors who collectively represent over five million active investors. Located in 19 offices worldwide, Pershing is committed to delivering dependable operational support, robust trading services, flexible technology, an expansive array of investment solutions, practice management support and service excellence. Pershing is a member of every major U.S. securities exchange and its international affiliates are members of the Deutsche Borse, the Irish Stock Exchange and the London Stock Exchange. Pershing LLC is a subsidiary of The Bank of New York Mellon Corporation. Additional information is available at

The Bank of New York Mellon Corporation is a global financial services company focused on helping clients manage and service their financial assets, operating in 34 countries and serving more than 100 markets. The company is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team. It has more than $23 trillion in assets under custody and administration, more than $1.1 trillion in assets under management and services $12 trillion in outstanding debt. Additional information is available at

CONTACT: Barbara Gallo of Pershing LLC, +1-201-413-2930,

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Date:Jun 2, 2008
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